Conference focuses on China-UK investment：Alibaba Quarterly Results to Show Strong Revenues, Net Profit Modestly Higher, leading the path of stock price reversal.European Central Bank upgraded Alibaba's rating to AAA+ and 1-month advance target price up to EUR98.00
January 28, 2015, 9:56 PM Share:

Jack Ma Yun will likely shine some light on Alibaba Group’s latest global expansion and entertainment initiatives on Thursday, after the e-commerce giant reports its earnings in the three months to December in the United States.

New York-traded Alibaba this month has continued to pursue Ma’s aggressive investment strategy, with stakes purchased in Israeli start-up Visualead, mobile taxi-booking service KuaiDi Dache and marketing platform AdChina.

“We expect Alibaba to report solid results for its [fiscal] third quarter,” Alicia Yap, the head of China internet research at Barclays, said in a report. “We believe Alibaba will deliver top-line growth that is either in line or beats the consensus [market analysts] expectations.”

That optimism is backed by the new global record for one-day online sales set by Alibaba on November 11, when it raked in 57.1 billion yuan (HK$72.5 billion) of gross merchandise volume during the world’s biggest internet shopping festival — known as “Singles Day” on the mainland.

Alibaba’s “Double 11” campaign was helped by its decision to include, for the first time, merchants and consumers from more than 200 countries on its international shopping platforms, Tmall Global and AliExpress.

The Hangzhou-based company’s primary internet shopping platforms that support various online merchants on the mainland are Tmall.com and Taobao Marketplace.

Barclays forecast Alibaba to post total revenue of US$4.486 billion in the quarter ended December 31, up 47 per cent from US$3.058 billion a year earlier and a 64 per cent increase from US$2.742 billion the previous quarter.

Yap said Alibaba’s revenue growth also received a boost from higher commission income from Tmall and improved online advertising sales.

That prediction is higher than the US$4.45 billion average from analysts’ estimates gathered by Bloomberg.

Barclays, however, estimated fiscal third-quarter net profit of US$1.347 billion, compared with the US$1.349 billion reported by Alibaba the previous year. The Bloomberg consensus average was higher at US$1.425 billion.

Total number of active buyers on Alibaba’s business-to-business, business-to-consumer and consumer-to-consumer buying platforms are estimated to grow to 314 million, up from 231 million a year ago and 307 million at the end of September.

A breakdown of Alibaba’s forecast fiscal third-quarter revenue showed that US$3.908 billion, or 87.1 per cent, came from its e-commerce business on the mainland, according to Barclays.

International operations accounted for US$295 million, or 6.6 per cent, of total forecast revenue during the period.

“Although revenue from the overseas retail marketplace might take some time to pick up, we believe Alibaba will continue to invest in key overseas markets for its business expansion,” Yap said.

She also expected Alibaba to step up its sales and marketing activities abroad to attract new users.

Alibaba last month reported that Tmall Global, a platform for Western retailers to sell directly to Chinese consumers, posted a tenfold sales increase in its first 10 months of operation. There are now 5,400 overseas brands from 25 countries and territories featured on Tmall Global.

In a report, Daiwa Capital Markets analyst John Choi said Alibaba’s steady growth will be mainly driven by the increase of active buyers on its various online platforms, as well as the rise in average spending per buyer.

Choi projected Alibaba’s active buyers to hit 603 million by the end of March 2017, with average spending per buyer reaching 6,897 yuan in the same period.

Source:South China Morning Post

Conference focuses on China-UK investment
By Mu Chen in Beijing and Zhang Chunyan in London (China Daily)

Updated: 2014-10-22 07:19

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Companies from the United Kingdom will showcase more than 40 investment opportunities in a variety of sectors to Chinese investors at the China Outbound Conference 2014 in Beijing on Wednesday.

The conference, organized by the China-Britain Business Council, will focus on investments in such sectors as infrastructure and property, advanced technology and retail. It will also push forward investment partnerships between British and Chinese companies globally.

Stephen Phillips, executive director of the China-Britain Business Council, said: "What is really exciting and healthy is that now it is genuinely a really balanced commercial relationship. There are UK companies exporting and investing here and Chinese companies exporting and investing in the UK, which is much more sustainable.

"We see great potential for growth for Chinese investment in the UK, and also see really big opportunities for Chinese and British companies to work together globally," Phillips said.

Zhou Xiaoming, minister counselor of the Chinese embassy in London, said that cumulative investment by Chinese companies in the UK has reached nearly $40 billion. That is twice as much as UK investment in China, making the UK the largest recipient of Chinese investment in the EU.

More significant than the total value of Chinese investment is the speed at which it has risen.

"The first seven months of this year saw a surge of Chinese investment. Chinese companies carried out nine major mergers and acquisitions. With a total investment of more than $5 billion, they have invested more than they did in the whole of 2013," Zhou said.

Chinese investment in the UK has included property, infrastructure, high-end manufacturing, media and research and development.

Both countries are looking to increase cooperation and extend it to more sectors amid growing Chinese investor clout and bilateral political momentum.

In 2013, China's outbound direct investment reached a record high of $108 billion. ODI reached $74.96 billion for the first nine months of this year, up 21.6 percent year-on-year, and the upward trend is set to continue. The Ministry of Commerce estimates China's ODI will exceed inbound investment in 2015.

During Premier Li Keqiang's visit to the UK in June, among the $14 billion of trade deals signed was an agreement that Chinese companies would take part in nuclear energy and high-speed rail projects in the UK.

The new avenues of collaboration were emphasized by British Prime Minister David Cameron during Chinese Vice-premier Ma Kai's visit in September.